Lessons from the German Emissions Trading System for buildings and road transport

The European Commission has proposed an extension of European emissions trading (EU ETS) to the buildings and transport sectors as part of the Fit for 55 legislative Package. Lessons learned from the German emissions trading system introduced in 2021 can be useful for a potential extension of the EU ETS to buildings and transport at EU level.

Our findings on the German ETS can help European policymakers strike the right balance between introducing a carbon pricing instrument that enables ambitious climate protection and creating a targeted and solid social compensation mechanism.